Benton Banking Co. v. Tennessee Farmers Mutual Insurance Co.

OPINION

ANDERSON, Chief Justice.

The sole issue presented by this appeal is whether a mortgagee’s interest as loss payee in insurance proceeds payable as a result of a fire loss to the collateral securing the mortgagee’s debt is affected by the extin-guishment of the secured debt after the loss.

The trial court held that the mortgagee bank had an insurable interest that the insurance company was required to protect and that their failure to do so required payment of the insurance proceeds to the bank. The Court of Appeals affirmed, ruling that the mortgagee bank’s insurable interest is…